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Federal Court Paves Way For Competitive Energy Storage

July 15, 2020

On July 14th 2020 the US Federal Appeals court decided to uphold Regulatory Commission Order 841 giving way for transmission grid operators to open their markets for participation of energy storage assets. Across deregulated regions in the U.S this means in a near future storage will be competing with other generation assets in the wholesale marketplace. The ruling gives authority to the Federal Energy Regulatory Commission (FERC) to push the different Independent System Operators (ISO) and Regional Transmission Organizations (RTO) to begin pilot programs for introduction of energy storage to their markets.

The importance of this ruling comes from constant opposition by the National Association of Regulatory Utility Commission to having the FERC control the regional introduction of storage assets. In the future this will allow for commercial, industrial, and municipal entities to engage in agreements to purchase capacity from energy storage projects in the wholesale market and reduce peak demand costs if the correct economics are present. As an example, an energy storage asset may charge itself when electric pricing is low and sell this to customers at lower prices when these are higher. Today the world’s most reliable source of Energy comes by having access to proper storage; the addition of these growing assets to the wholesale market can increase competition and reduce prices for end consumers.